The Strategist For Those Impatient To Do Great Things, and Frustrated With The Usual Methods

Case Studies

1. In Search of “Wow”

The Issue

The client was a software business. It wanted its software to deliver “wow” – quite simply, to make users and potential customers think “wow” when they saw it.

There were two issues:

A feeling that the organisation needed to become more creative, adding more “wow” features to the product;

A difficulty in delivering “wow” features when they were conceived. Projects took longer and longer as new features were added. Each implementation became more and more bespoke, slowing things down and increasing costs. Supporting all the proliferation of different versions became more and more onerous.

What We Could Have Done

To generate more “wow” ideas, we could have run creativity and innovation workshops for all sales, account management and development staff. We could have run “wow” brainstorming sessions at the start of each project. We could have hired a creative director.

To deliver the “wow” ideas we would have implemented stronger project management methodologies. We would have trained developers in project management and agile methodologies. We would have invested in better methods of keeping track of all the different versions.

What We Actually Did

We spoke to customers and visited one during the introduction of a system. We discovered that the product was already “wow.” It was streets ahead of any of its competitors, and of anything the customers already had. This was becoming more and more true as the product moved from the early adopters to the mainstream users.

We realised that “wow” was delivered by an efficient, on-time implementation of the standard product. All the efforts to deliver “wow” in product features was in fact getting in the way of this. We shifted the emphasis accordingly resulting in faster implementations, happier clients and less internal stress.

Why It Worked

The breakthrough came when I suggested that we needed to distinguish between “wow” which provided high impact at high cost and “wow” which provided high impact at low cost – the principle of leverage. Shifting attention from the former to the latter enabled us to see the truth.

2. Failing To Deliver

The Issue

The client was a marketing consultancy. It had plenty of work, but was struggling to complete projects. Working hours were reaching unsustainable levels, and stress was becoming an issue.

What We Could Have Done

What We Actually Did

Analysed the profitability of projects. We found that while the average was borderline acceptable (or, if you prefer, mediocre), it hid a great deal of variability. There were some projects more than twice as profitable as the average, and others which made almost no money at all. The least profitable accounted for one third of the total effort expended and almost no profit – the equivalent of working a day and a half a week for nothing.

It became apparent that there was no way of solving the problem by becoming more efficient. The real issue was that we were taking on a lot of projects whose revenues did not cover the costs of delivering them, no matter how efficient we became.

We focussed on selling more of the right sort of projects and fewer of the wrong sort. Average profitability rose by 25% over 9 months without any significant changes in project management.

Why It Worked

Strategy trumps skills. Changes to strategy – the choice of what you sell – produce more impact at less cost than changes in organisation and skills. Moreover, if there is a problem with the strategy, action at those other levels will not produce a meaningful benefit.

3. Failing to Deliver (Again)

The Issue

This time it was a software company which was struggling to deliver projects on time. It was suffering endemic delays, and pressure to meet deadlines was resulting in rushed work and poor quality. Projects consistently went over budget.

What We Actually Did

Realised that there was no problem with development; the problems were introduced earlier in the process. Sales people would close sales by promising extra features, or promising that the product would do things it was not designed to do. At the specification stage, more problems were introduced. These could have been new features or modifications (offered at no extra charge) or agreement to unrealistic timescales.

We introduced better procedures for contracting, and educated account managers in the importance of resisting (or getting paid for) changes requested after the project had started. This done, we found that development was absolutely fine.

Why This Worked

Two principles:

Organisations are systems, and you need to take a systemic view. Imagine you have a river at the bottom of your garden, and one day it is full of dead fish. You don’t look for the source of the problem at the bottom or your garden, you look upstream. Similarly in organisations; a problem which manifests in one department has probably been created further upstream, and so that is where you look.

There are two ways of meeting demand. One is to respond to whatever is asked of you, the other is to manage demand down to what you can deliver. Very often the first leads to madness while the second leads to happy customers and healthy profits.

Note that the problems in this and the previous case appear almost identical, but the solutions are completely different. The only thing they have in common is that they are both easier than the first solution which came to mind.

4. Product Profitability Analysis

The Issue

A manufacturing company needed to do a complete analysis of its product range (several hundred lines in more than a dozen different categories involving five different processes).

What We Could Have Done

Studied and timed the process for each product line to identify the amount of manpower cost incurred in producing each unit;

Studied and timed the set up time for each production run and calculated the average size of a run to identify the amount of set up time to be included in the cost of each unit;

Calculated the overhead absorption rate for the different classes of labour;

Calculated the cost ancillary functions (warehousing, production planning, etc) and added that to the overhead rate calculated above;

Identified average wastage rates of different processes and adjusted unit costs accordingly;

Identified the capital cost and maintenance expense of each machine and added that to unit costs.

What We Actually Did

Noticed that the company had a few months previously considered outsourcing production, and had obtained quotations from third parties for production of 75% of the product range. Used these figures.

Why It Worked

The principle of pragmatism; the objective was not to produce a theoretically correct set of cost figures according to the textbook procedure. The objective was to inform a decision on what to produce and what not to. It was enough to identify very profitable products (to promote more heavily) and unprofitable products (to de-emphasise or drop). The products in the middle could be ignored. For this purpose, the costs from the third parties were good enough.